Management pack - First I've heard of it?

NeilCr

ThePants999 wrote: »

Looks like you've missed the fact that they ALREADY own the freehold. There's no lease involved here. And apparently there's no covenants requiring them to pay service charges either. Looks like this management company have been having a whale of a time collecting money they're not actually owed for doing a job they're not actually required to do!

Isn't the point that they own the freehold of their house but are caught because the freehold of the estate the house is on is owned by someone else (the builder). I'm in the same situation but we took on the estate freehold from the builder

I've had this twice and - to be honest in both cases - the builder was more than happy to get shot of the estate freehold once all the properties had been sold. As someone else said it might cost a few bob, though.

I've got to say I am hugely surprised that there are no covenants regarding service charges. Given there are 58 properties you'd have thought this would have been picked up before

moneyistooshorttomention

Well - given that its 58 properties involved - in OP's position I'd be out there ringing at the doorbells of all the 57 other properties involved and telling them about this malarkey.

Followed by some sort of communal action on this. Maybe a communal letter from a solicitor saying "Na na na - nowt in writing - now take a long jump off a short pier - because you never told us/got our agreement and there ain't nowt in writing. So - blimmin' there" phrased in suitable solicitor language:p

To me - it feels like there's a good chance they'd back off on this if faced with a united "Where is it in writing then? Huh? Huh?" response.

economic

OP - so i think you need to explain exactly what you own and if there are any communal areas etc?

is there a lease you are party of?

futuresbright

economic wrote: »

OP - so i think you need to explain exactly what you own and if there are any communal areas etc?

is there a lease you are party of?

So as far as I know,

I own my house and the land it sits on up to its borders,

As do the neighbours I have spoken to so far, however there are some "affordable housing" which people rent from a housing association', not sure if these are classed as freehold or leasehold?

The house builder still control the roads and footpaths but I believe they are soon to be adopted by the local council.

The main drainage has just been adopted by United Utilities.

The management company as far as I know control a 30m x 20m piece of grass planted with shrubbery, 3 flower beds approx 10 m x 2m and various trees planted across our estate.

ThePants999

NeilCr wrote: »

Isn't the point that they own the freehold of their house but are caught because the freehold of the estate the house is on is owned by someone else (the builder).

Freeholds refer to land. The OP owns the land their house is on. I assume by "the freehold of the estate the house is on" you mean the communal areas that don't form part of any individual house freehold.

If so, then until we get some more information, it appears to be the builder who is "caught", not the OP, because the builder owns the communal land, but has apparently failed to put any legal mechanism in place to allow them to charge the homeowners for its upkeep. They should have put covenants on the house freehold titles for that. If they had, the OP could have been considered "caught", but unless they're misreading their title, they get off scot free.

Emmanuel_chill

I don't think that the management pack isn't interesting to the buyer themselves, their only interest is on the solicitors alone.

NeilCr

ThePants999 wrote: »

Freeholds refer to land. The OP owns the land their house is on. I assume by "the freehold of the estate the house is on" you mean the communal areas that don't form part of any individual house freehold.

If so, then until we get some more information, it appears to be the builder who is "caught", not the OP, because the builder owns the communal land, but has apparently failed to put any legal mechanism in place to allow them to charge the homeowners for its upkeep. They should have put covenants on the house freehold titles for that. If they had, the OP could have been considered "caught", but unless they're misreading their title, they get off scot free.

Yep

I'd say again that it does seem very surprising that given the estate has been built for four years and there are fifty eight properties on it that this issue ( I mean the payment of service charges) has only just arisen. While the OP is sanguine about them you'd have thought that someone else would have raised the matter before.

And, of course, if it turns out that service charges aren't payable there will be the issue of what happens to the communal areas. It might prove difficult to get the builder to shell out on ongoing basis to keep them in good nick. So the OP may get "caught" in a different way

moneyistooshorttomention

futuresbright wrote: »

The management company as far as I know control a 30m x 20m piece of grass planted with shrubbery, 3 flower beds approx 10 m x 2m and various trees planted across our estate.

How hard could it be - if need be - for 58 houses to deal with this informally themselves?

There's bound to be at least a couple of keen gardeners dying to get their mitts on a few more plants to keep up plus someone with a lawn-mower that would mow it, say, once a fortnight and just shrug and regard it as their "deed for the day for the community".

Where some might see a potential problem - I see a potential opportunity to say "If Todmorden can do it (ie Incredible Edible Todmorden) and be growing food plants every where - then this could be our chance. Right - out with the shrubs and in with fruit trees etc".

futuresbright

So i have recieved replies from both the house builder company solicitor today and the management company...

A few things of interest from solicitor first:

$$$$$$$= Management company
£££££££=House builder

[FONT=&quot]1. [/FONT][FONT=&quot]I asked previously “where is it written down that there are fees payable to $$$$$$$ when selling?” If as I suspect, the Ltd company appointed $$$$$$$ then they, the Ltd company, should have known in advance what fees were payable. I have read every last piece of correspondence from £££££££ and $$$$$$$ to no avail. Could you point me in the right direction?The fees are not written anywhere as far as I am aware. Your solicitors acting for you at the time of purchase should have advised you that fees may be payable to the management company at the time of selling. This is the same for all properties where a management company exists. £££££££ does now document this in the Transfer Deed for transparency however at the time you purchased this may not have been the case.

Wonder why that has changed? Probably amended sometime this week :rotfl:

And from the managment company:

[/FONT]

• [FONT=&quot]We confirm that we are the appointed as managing agent for the development. Under the transfer deed we are able to charge a reasonable fee under Part 11 for the management of the estate. It should be noted that any fees that are requested are in no way demanded,they are based on reasonable costs incurred as a result of managing the estate.[/FONT]

Part 11 is here can anyone point me to the part about reasonable fees?


https://ibb.co/nftAYa



[FONT=&quot]"As a result of producing such information a charge is levied for producing the same. However, for freehold houses the charge for a management pack has since been reduced to £200.00 plus VAT as leasehold properties require further administration and management a higher fee is charged. "
[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]Again when was this changed? Mty neighbour only moved a few weeks ago and was charged the full fee:rotfl:
[/FONT]
[FONT=&quot]
[/FONT]
[FONT=&quot]There is more but these were my favourite parts, i will be contacting both once again tommorow :mad:
[/FONT]

ThePants999

OK, you've got an "estate rentcharge". That's exactly what I had on my last house. (Well, almost exactly - we had a residents' association in the form of a charitable trust instead of a management company, but that's unimportant.)

Let me explain how it works - and having thrown away my paperwork relating to that house, I just paid £3 to the Land Registry to remind myself, I hope you're grateful

- While they owned the land, the builders gave themselves a Grant of Estate Rentcharge, which basically says that the owner of the rentcharge has to do things (maintain the estate), and is allowed to collect money from the grantor of the rentcharge in return. The "Part 11" you've got is almost certainly a piece of the Deed of Grant of Estate Rentcharge that set this up - the section that details the obligations of the rentcharge owner.

Here's an example I found of such a deed: http://eiv.org.uk/wp-content/uploads/2015/04/Rentcharge.pdf

- They would also have noted this in the Charges Register on the title.

- They added a restriction to the proprietorship register that says that the title can't be transferred without their consent.

- Then they created a deed of covenant, or deed of transfer, that the buyer has to sign on purchasing the property. It basically commits the buyer to taking over as the "grantor" of the rentcharge (and therefore paying it), and also commits the buyer not to sell the property without making the subsequent buyer do exactly the same thing.

To give you an example, my title contained this in the Property Register:

<date of first sale> The land has the benefit of the rights granted by but is
subject to the rights reserved by the Transfer dated 31 October 2000
referred to in the Charges Register.

And it had this in the Proprietorship Register:

<date of first sale> RESTRICTION: Except under an order of the registrar no
transfer or lease by the proprietor of the land is to be registered
without the consent of <Residents Association>.

<date I bought it> The Transfer to the proprietor contains a covenant to
observe and perform the covenants referred to in the Charges Register
and of indemnity in respect thereof.

And finally, it had this in the Charges Register:

<date while the builder owned it> A Deed dated 1 August 1997 made between (1) <builder> and (2) <Residents Association> contains a grant of a Rentcharge as therein mentioned.

<date of first sale> A Transfer of the land in this title made between (1) <builder> (2) <Residents Association> and (3) <first buyer> contains restrictive covenants.

The deed of transfer said this:

The Transfer provides that the Transferee and successors in title and the Company will enter into a Deed of Covenant in the manner set out in the Transfer and the parties hereto have agreed to enter into these presents accordingly.

...

The Transferee hereby covenants with the Company that she/he and her/his successors in title will at
all times from the date of the transfer of the said property to the Transferee:
a. Duly pay all sums payable under the clauses contained within the Rent Charge Deed.
b. Observe and perform all the covenants restrictions and stipulations contained in the Transfer
and on the part of the Transferee hereof to be performed (whether running with the Rent
Charge Deed or of a purely personal collateral nature) to the same extent as if the same were
fully set out herein.
c. For so long as the Transferee retains any estate or interest in the said property not resign
from or dispose of the rights attaching to her/his membership of the Company other than to
a mortgage of the said property.

3. The Company hereby covenants with the Transferee that the Company will at all times during the
term of the Rent Charge Deed comply with the covenants set out in the Transfer.

Dig out your files from when you bought the place. What did your solicitor get you to sign? I expect it included such a deed (which $$$$$$$ refers to as the "transfer deed"). Assuming your builder's system wasn't materially different to mine, then:
- the deed of transfer compels you to pay the service charge ("rentcharge")
- I suspect that there probably ISN'T anything in writing saying that you have to buy the management pack for £X, but there IS something in writing saying you can't sell the house without the management company's consent, and they won't give their consent unless you pay them! (They've got a little bit of work to do because they need to warrant to the buyer's solicitor that you're up to date with the rentcharge and they won't be inheriting any arrears, and they have to sort out a new deed of transfer with the buyer.)

If you genuinely believe you signed no such deed, hop over to the Land Registry, pay £3 and have a look at your title register.